Equity Release
Many people have found equity release an effective way of generating capital from their home, enabling them to afford the life they want in retirement and do the things they want to do. However, there's a lot to find out about, a lot to understand and a lot to think about.

APH Mortgages Equity Release Service is here to help you understand what’s involved and to offer you the personal advice and support you need to make an informed choice. By understanding your hopes and concerns for the future, together with your financial circumstances, our lifetime mortgage adviser, James Wareham will help you review your options.

A Lifetime Mortgage – How does it work?

  • The lender gives you a lump sum or monthly income (or both). You pay nothing – the interest is ‘rolled up’ into the loan. The amount borrowed plus this interest is repaid out of the proceeds from the sale of the property either when you sell your home or after you die.
  • How much you can borrow depends on the value of your home and your age – the older you are, the higher the percentage of your property’s value you can borrow. Generally, you will not be advanced more than 50% of the value of the property.
  • Money released from the value of your principle residence is free of tax, although if the cash is then invested there may be tax to pay on any income or growth.
  • You don’t have to move house or sell your home to unlock equity. With reputable Safe Home Income Plans (see details later) there is a guarantee that you will be able to continue to live in and enjoy your home until the day you die or you decide to sell.
  • In many cases you will still be able to leave something of the property’s value to your family.
  • Of course, if you don’t have children or family to leave your property to, then equity release might seem an even more attractive concept.
  • The money can also be used to pay for care bills without having to sell up at what can be a traumatic enough time.
Potential drawbacks: 
  • The value of your estate may be reduced.
  • Your immediate family might not agree with your decision to take a lifetime mortgage. It is important to involve them in the process.
  • Taking out a lifetime mortgage may affect your entitlement to state benefits.

Do I qualify for Lifetime Mortgage?

 

To qualify for a lifetime mortgage you will normally have to fulfill the following conditions:

 

 

  • You are aged 55 or over
  • You own a property that is worth at least £70,000
  • You live within the UK mainland (including Northern Ireland)
  • You have little or no outstanding mortgage or other loan secured on the property (when your funds are released, any outstanding mortgage must be repaid)
  • Your property is freehold or leasehold with a minimum remaining lease period of 75 years
  • Your property is of standard construction and in good condition.

Safe home income plans and lifetime mortgages

  • APH only arrange lifetime mortgages through companies subscribing to the SHIP Code of Practice
  • These companies undertake to provide a fair, simple and complete presentation of any home income plan they may offer you.
  • The Code has been welcomed by Age Concern.
  • You will be given full details of your own obligations, commitments and rights under the plan, including security of tenure on your home for you and your partner (if applying jointly) for the rest of your lives.
  • You will be told what costs are involved, your tax position and the possible effect on your plan of moving house and of changing house values, as well as the effect of the transaction on the value of your estate on death.
  • Your own solicitors will act on your behalf and look after your interests at every stage. Before your SHIP scheme can be finalised, they will be required to sign a certificate confirming that the principal terms of the contract have been fully explained to you.
  • A SHIP plan guarantees that you cannot lose your home - whatever happens to the stock market or to interest rates.
  • All SHIP plans carry a "no negative equity" guarantee i.e. you will never owe more than the value of your home.

A lifetime mortgage will not suit everyone. It is always worth considering whether funds could be raised affordably from other sources before going down this route. You could consider these alternatives to equity release:

  • Downsizing, i.e. moving to a smaller property
  • Moving in with family
  • Obtaining money from family
  • Taking out other borrowing options
  • Using savings or investments

This is a lifetime mortgage.  To understand the features and risks, ask for a personalised illustration 

APH's typical fee for arranging your mortgage is £250, however depending on your circumstances, a fee of up to 1.5% of the mortgage amount may be

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

For advice on Lifetime Mortgages, contact James Wareham at our Hitchin office:

APH Mortgages 01462 436193, e mail This e-mail address is being protected from spambots, you need JavaScript enabled to view it

 
 
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